ZBB Energy Corporation Director Compensation Policy

 

(i)

An annual retainer in the amount of $72,000, to be awarded in accordance with clause (iv) below.

 

(ii)

In addition, an annual Chairman’s retainer in the following amounts, to be awarded in accordance with clause (iv) below: $30,000 for the Chairman of the Board; $12,000 for the Chairman of the Audit Committee and for the Chairman of the Compensation Committee; and $8,000 for the Chairman of the Nominating and Governance Committee.

 

(iii)

In addition, an annual committee membership fee in the amount of $6,000 for each committee of the Board on which the non-employee director serves (treating Richard Payne’s service as a member of the Board of the Company’s China joint venture entity as service on a committee of the Board), payable in cash quarterly in arrears, provided the non-employee director remains in continuous service with the Board through each applicable payment date.

 

(iv)

The total amounts determined under clauses (i) and (ii) above for a non-employee director for a year will be awarded as of the date of the annual meeting of shareholders of the Company (the “Annual Meeting”) in the form of restricted stock units (“RSUs”) under the Company’s 2012 Non-Employee Director Equity Compensation Plan (or any successor plan thereto) (the “Stock Plan”).   The RSUs will have the following terms and conditions: (A) the number of RSUs will be determined by dividing the dollar amount of the award by the closing price of the Company’s common stock on the first business day preceding the Annual Meeting, rounded up to the next whole share (provided that notwithstanding the foregoing the price to be used to determine the number of RSUs to be issued on the date of the 2012 Annual Meeting shall be $0.38); (B) 25% of the RSUs will vest on the date of grant, and the remaining RSUs will vest 25% each on March 31, June 30 and September 30 following the Annual Meeting, provided the non-employee director remains in continuous service with the Board through the applicable vesting date; (C) the RSUs will vest earlier in the event of a “Change in Control” of the Company (as defined in the Stock Plan); (D) vested RSUs will be payable upon the earlier of (x) the date that is six months after the non-employee director “separates from service” with the Board (within the meaning of Section 409A of the Internal Revenue Code) or (y) the date of a Change in Control (provided that the Change in Control is a permissible “change in control” payment event within the meaning of Section 409A of the Internal Revenue Code); (E) vested RSUs will be payable in the form of one share of common stock of the Company for each vested RSU then payable; and (F) the RSUs will otherwise be subject to the terms of the Stock Plan and will be evidenced by an appropriate RSU award agreement.